By Priya Adhlakha and Ruhee Passi
In a recent case the High Court of Delhi was confronted with the contentious issue of sale of goods online and subsequent vulnerability towards the IP protection of such goods. The Court while recognizing the surge in IP infringement cases encountered on the online platform was of the view that the online marketing platforms have to come up with a solution to this problem or face the claims for damages.
Brief facts of the case: Initially, the Titan Company Limited (hereinafter referred to as the Plaintiff) had filed a commercial suit against Rohit Kumar Jain, Dharam Pal and Snapdeal Pvt. Ltd. (Defendants) for permanent injunction restraining the alleged counterfeiting of the Plaintiff’s products sold under the marks “Titan” and “Fasttrack.”
In view of the facts and circumstances of the case, the Delhi High Court has passed a decree in favour of the Plaintiff and against the sellers/ defendants who have been alleged of selling counterfeit Titan watches on the online platform Snapdeal Pvt. Ltd. The Hon’ble Court also directed both the sellers to pay Rs. 1,50,000 each to the Plaintiff.
In its order of July 29, 2019, the Delhi High Court had passed an ex-parte ad interim injunction in favour of Plaintiff. The Court also held that a column of details/particulars of the manufacturer was provided on Snapdeal’s platform, however, no details were provided. Further, despite being notified about the URLs (Uniform Resource Locator) of the objectionable listings by the Plaintiff, Snapdeal had not removed the same till the first date of hearing.
Thereafter, the matter came up for hearing on August 23, 2019, wherein the Plaintiff contended that Snapdeal was still showing listings as its own range of products which precluded Snapdeal from claiming a defense under section 79 of the Information Technology Act.
What does Section 79 of Information Technology Act say?
Section 79 of the Information Technology Act exempts intermediaries from liability in certain circumstances. For instance, the safe harbor protection under Section 79 is extended to intermediaries in cases wherein they acted only as facilitators. It would be relevant to mention in the aforesaid context that Snapdeal had contended that after receiving the communications from the Plaintiff and despite removing more than 500 listings, new listings kept on cropping up.
Court’s Order and Observation
The Hon’ble Delhi High Court held that “infringement of intellectual property rights, as of today, is happening more via such online marketing platforms than physically, with on most occasions, the identity of the seller being not traceable and the said online marketing platforms claiming the defence of Section 79.” The Court succinctly remarked that the online marketing platforms have to come up with a solution to this problem or face the claims for damages.
Lastly, the Hon’ble Court directed Snapdeal to furnish an affidavit with particulars of all the goods sold on its portal under the marks TITAN and FASTTRACK, the sale price collected thereof and the commission earned by Snapdeal itself and the amount disbursed to the so-called sellers of the said goods. The said particulars are to be given with effect from 1st January, 2018 and Snapdeal’s technical official has been directed to be present on the next date of hearing.
In the recent past several such cases have emerged wherein consumers and original IP holders have complained of sale of counterfeit goods online. It is expected that newly incorporated provisions pertaining to E-commerce and product liability action under the Consumer Protection Bill, 2018 would deter the infringers from selling counterfeit goods online.